U.S. Markets close in 2 hrs 55 mins

ProAssurance's (PRA) Q1 Earnings Lag Estimates, Plunge Y/Y

Zacks Equity Research

ProAssurance Corporation’s PRA first-quarter 2019 operating earnings per share of 8 cents missed the Zacks Consensus Estimate of 31 cents by 74.2%. Moreover, the bottom line tumbled 80% year over year, mainly due to wide loss trends in healthcare professional liability.

Quarterly operating revenues of ProAssurancerose 10% to $233 million from the prior-year quarter’s level,owing to higher premiums. The top line also beat the Zacks Consensus Estimate by 2.2%.

Quarterly Operational Update

Gross premiums written were up15.1% year over year to $280 million, primarily banking on higher premiums across the Specialty P&C segment, Segregated Portfolio Cell Reinsurance segment and the Lloyd's Syndicates segments. Moreover, net premiums earned rose 11.2% year over year.

Net investment income increased 3.6% year over year to $22.8 million.
Net realized investment income of the company was$36.6 million against the prior-year quarter’s loss of $12.5 million.

Total expenses escalated 19.6% year over year to $230 million. This rise in costs mainly stemmed from higher net loss and loss adjustment expenses.

ProAssurance Corporation Price, Consensus and EPS Surprise

ProAssurance Corporation Price, Consensus and EPS Surprise | ProAssurance Corporation Quote

Quarterly Segmental Results

Specialty P&C Insurance Segment

Total revenues of $125 million increased 7.8% from the prior-year quarter’s figure.

Gross premiums written of $166.4 million rose 18.4% year over year.

Total expenses of $137 million mounted 23.1% year over year, primarily due to net loss and loss adjustment expenses.

Workers' Compensation Segment

Total revenues of $46.7 million rose 7.2% year over year, mainly owing to higher premiums earned.

Gross premiums written were $89.4 million, down 2.5% from the year-earlier period’s number, mainly due to decrease in audit premiums and a downfall in renewal pricing.

Total expenses of $44.6 million came in at an elevation of 9.3% year over year.

Lloyd's Syndicate Segment

Total revenues of $19.7 million surged 45.7% year over year.

Gross premiums written were $23.5 million, up 90.8% from the figure acquired in the comparable quarter last year.

Total expenses of $19.3 million rose23.2% year over year.

Corporate Segment

The company reported revenues of $55 million, skyrocketing 384.3% year over year.

Operating expenses of $4.5 million decreased 2.3% from the prior-year quarter’s level. Interest expense of $4.3 million increased 16.9% year over year.

Financial Position

As of Mar 31, 2019, ProAssurance’s total investments were $3.4 billion, up 2% from the number registered at year-end 2018.

At first-quarter end, the company’s total assets were $4.7 billion, up 2.5% from the count at 2018 end.

As of Mar 31, 2019, the insurer’s shareholder equity inched up 2.5% to $1.5 billion from the tally as of Dec 31, 2018.

Share Repurchase & Dividend Update

The company’s board of directors approved a regular dividend of 31 cents per share in March 2019,paid to its shareholders on Apr 22, 2019.

Zacks Rank

ProAssurance carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Among other players from the insurance industry having reported first-quarter earnings so far, the bottom-line results of The Travelers Companies, Inc. TRV , Cincinnati Financial Corporation CINF and The Progressive Corporation PGR surpass the respective Zacks Consensus Estimate.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>